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DuPont Leads a Falling Dow

The Dow Jones Industrial Average is down today, but upside potential from DuPont is helping pull its stock higher.

The Dow Jones Industrial Average(DJINDICES:^DJI) has been trading lower most of the day today, partly because the market now expects the Federal Reserve to raise interest rates sooner than it formerly expected because the economy is doing so well. With minutes left in trading it's down 0.08%.

This dance of good economic news and stocks falling has been playing out for months, and long-term investors need to look past the short-term reaction to the long-term ramifications for companies. Lower unemployment and higher GDP will lead to more spending and higher profit potential for the companies we own stocks in. That may mean higher interest rates, but long term I'd rather see higher rates and higher profits than companies reporting flat earnings, like they did last year.

Leading a falling Dow A surprising leader today is chemical and agriculture product maker DuPont(NYSE:DD), which is up 0.9%. Analysts at Bank of America/Merrill Lynch upgraded the stock to a buy rating and added a $70 price target. That's not huge upside from the share price of around $63.70 today, but it was apparently enough for a higher rating.

You can see below that DuPont has seen revenue fall over the past two years and net income is only up slightly, but one byproduct of that is a sharp decline in the stock's P/E ratio.

The current P/E ratio of 12.4 and dividend yield of 2.9% are among the best values on the Dow Jones Industrial Average, and it won't take a lot for growth to pick up. Agriculture is the company's largest segment and its 15% growth rate last quarter, which bodes well for the future. DuPont is building a line of seed and other products that augment each other and create stickiness to the business.

Chemicals like titanium dioxide also had unusually weak performance last year, something that should improve as the economy picks up steam.

DuPont is priced so low and has such upside that it's quietly a great way to play the economic recovery. Every segment of its business will benefit from global growth, and investors are just starting to see some of that value today.